Questions

Service Tax return not filed for the last six years?Ankit MadhogarhiaQuestioned On 15-12-2014

Dear Team,
One of my Client had not filed ST3 for the last year and he had not paid the service tax also .now he want to clear all his dues along with Interest and penaltty.Please let me know can he file the service tax return and does he need to pay the penalty of Rs 20000/- for no filing of ST3 instead of Rs 2000 which was there in the earlier days?Please do the needful .regards,Ankit

Answer by the ExpertCA Varun Kumar VijayAnswered On 16-12-2014

Yes, first of all he will pay the following liabilities, then he can file the service tax return as per Section 70 of Finance Act, 1994 read with Rule 7 of Service Tax Rules, 1994:-
1. Payment of service tax as per section 68 Finance Act, 1994 read with Rule 6 of Service Tax Rules, 1994.
2. Interest as per section 75 of the Act, ibid as amended by Finance Act 2014.
3. Late fees as section 70 Finance Act, 1994 read with Rule 7(c) of Service Tax Rules, 1994.

Rule 7(c)
Where the return prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall pay to the credit of the Central Government, for the period of delay of-

(i) fifteen days from the date prescribed for submission of such return, an amount of five hundred rupees;
(ii) beyond fifteen days but not later than thirty days from the date prescribed for submission of such return, an amount of one thousand rupees; and
(iii) beyond thirty days from the date prescribed for submission of such return an amount of one thousand rupees plus one hundred rupees for every day from the thirty first day till the date of furnishing the said return:

Provided that the total amount payable in terms of this rule, for delayed submission of return, shall not exceed the amount (i.e. Rs.20,000/-**) specified in section 70 of the Act.

**substituted for Rs 2,000/- by Finance Act, 2011 w.e.f. 08-04-2011.

It is concluded that if service tax returns related to the period after 08-04-2011, then the maximum late fee would be 20,000/- instead of 2,000/-.

VCES SCHEMEKRISHAN GOPAL SHARMAQuestioned On 15-12-2014

A client is liable to pay service tax of Rs. 900,000 for the period from april 2012 to dec 2012 simultaneously he has paid service tax of Rs. 300,000 on input services during the same period. under the VCES scheme, cenvat credit of Rs. 300,000 will be allowed or not ?
what is the amount of "TAX DUE" as defined under clause 95(e) of Chapter VI of VCES Scheme ?
Is the TAX DUE Rs. 900,000 OR Rs. 600,000

Answer by the ExpertAnmol GuptaAnswered On 18-12-2014

CENVAT Credit of Rs. 300,000 shall be allowed from 1st January, 2013 onwards as per Number 17 of table given in Circular No. 170/5 /2013 - ST.
The "tax dues" has been defined under Section 105(e) not clause 95(e) and amount of the same shall be Rs. 900,000.

Applicabilty of service Tax on Import of ServiceRohit guptaQuestioned On 15-12-2014

The question is regarding applicablity of service tax, and if yes then taxable amount?

Fact of Case
Company has imported a Plant & machinery from company XYZ in china . In the P.O of contract it has been mentioned that installation,Errection & commissioning will be done by the XYZ company only. For this officials from XYZ comapny will come to India to install and provide assistance.

Question
Whether above mentioned case will attract service tax under import of service or works contract service & if Yes at what rate?

Thanks

Answer by the ExpertCA Sumit MishraAnswered On 17-12-2014

The Service shall be considered as Import of Services.

Erection,commissioning and installation of plant and machinery shall be considered as Original Works.

As per Rule 2A of the Service Tax Determination of Value Rules, 2006, service tax shall be payable on 40% value of services @12.36%.

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